Trade turnover increased year on year

5 June 2018

Evelin Puura, Mirgit Silla

In 2017, exports of goods from Estonia totalled 12.9 billion euros and imports to Estonia 14.7 billion euros at current prices. Trade turnover increased for the second consecutive year, exports grew by 8%, or approximately 1 billion euros and imports grew by 9%, or 1.2 billion euros compared to 2016.

The trade deficit in 2017 was 1.9 billion euros. Compared to 2016, the deficit increased by 264 million euros. The biggest surplus was recorded in trade in wood and articles of wood and miscellaneous manufactured articles (incl. furniture and prefabricated wooden buildings) and the biggest deficit in trade in transport equipment and raw materials and products of the chemical industry.

As in previous years, electrical machinery and equipment was exported the most from Estonia. It accounted for 17% of Estonia’s total exports in 2017. Electrical machinery and equipment was followed by wood and articles of wood (11%) and mineral products (10%). The increase in exports was mainly caused by a rise in the exports of mineral products (36%), metals and products thereof (25%) and wood and articles of wood (14%). The greatest year-on-year decrease was recorded in the exports of electrical machinery and equipment (14%).

The share of goods of Estonian origin in total exports has remained stable in recent years – at 72%. Among the top destination countries for exports from Estonia, the share of exports of goods of Estonian origin was the biggest for Denmark – 92% of all the goods exported from Estonia to Denmark were of Estonian origin. Denmark was followed by Sweden (91%), Norway and the United Kingdom (both 90%). Among the main destination countries for Estonia’s exports, the share of Estonian goods was the smallest in dispatches to Russia (25%), Lithuania (39%) and Latvia (50%).

By commodity section, the biggest share of goods of Estonian origin was recorded in the exports of wood and articles of wood (97%). The second largest share was contributed by the exports of miscellaneous manufactured articles (incl. furniture, mattresses, prefabricated buildings) (92%). Paper and articles thereof was third (88%).

The biggest share in imports was held by electrical machinery and equipment, accounting for 15% of Estonia’s total imports. The second place was held by transport equipment (13%) and the third place by agricultural products and food preparations, machinery and mechanical appliances and mineral products (10% each). The biggest year-on-year increase was recorded in the imports of transport equipment (33%) and mineral products (22%), whereas the imports of electrical machinery and equipment declined (8%).

Based on end-use, goods can be classified as capital goods, intermediate goods or consumption goods. The biggest share in Estonia’s total exports in 2017 was held by intermediates, i.e. inputs for the production of other goods, which amounted to 56% of total exports. Compared to 2016, the exports of intermediate goods increased by 14 percentage points. In 2017, capital goods accounted for 20% of Estonia’s total exports, which is 2 percentage points less than the year before. In 2017, the exports of capital goods decreased by 5%, mainly due to a fall in the exports of electrical machinery and equipment. The exports of consumption goods accounted for 20% of Estonia’s total exports – as much as in 2016. In 2017, the exports of consumption goods increased by 6% compared to the previous year.

Intermediate goods held the biggest share also in imports – 50% of total imports. The imports of intermediates increased by 9 percentage points year on year. The second place was occupied by consumption goods (23%) and the third place by capital goods (18%). The large share of intermediate goods in imports shows that Estonia’s manufacturing industry is dependent on imported components. The imports of consumption goods are an indicator of internal demand. The imports of consumption goods increased by 6% compared to 2016. The rise in these imports indicates Estonia’s increasing domestic consumption.

Estonia exported goods to 180 countries and imported goods from 133 countries. A positive foreign trade balance was recorded in the case of 130 countries. The biggest surplus – 455 million euros – was recorded in trade with Sweden, which was followed by Norway with 420 million euros and the USA with 226 million euros. The biggest deficit was recorded in trade with Poland and Germany – 794 million and 625 million euros, respectively.

Estonia’s most important trading partner for exports in 2017 was Finland (see the table at the end of article). Finland accounted for 16% of Estonia’s total exports. Exports to Sweden accounted for 13% and exports to Latvia for 9% of total exports. The largest year-on-year increase was recorded in dispatches to Germany (up by 236 million euros, or 34%), Finland (up by 160 million euros, or 8%) and Russia (up by 159 million euros, or 20%). The largest decrease was registered in exports to Sweden (down by 402 million euros, or 19%), Mexico (down by 89 million euros, or 48%), and Nigeria (down by 23 million euros, or 65%).

The biggest share of goods imported to Estonia in 2017 came from Finland, which accounted for 14% of Estonia’s total imports. Finland was followed by Germany (11%), Lithuania and Sweden (both 9%). Compared to 2016, the biggest increase was recorded in arrivals from Finland (up by 150 million euros, or 17%) and Russia (up by 183 million euros, or 24%). The most significant decrease occurred in imports from Hungary (down by 173 million euros, or 63%) and the USA (down by 45 million euros, or 23%).

In 2017, the share of European Union (EU) countries in Estonia’s total exports was 72% and in total imports – 82%. The trade deficit with other EU countries totalled 2.9 billion euros, which is 557 million euros more than in 2016. Trade with EU countries increased in 2017 compared to 2016 – exports by 5% and imports by 9%. Trade with non-EU countries grew as well: exports increased by 543 million euros and imports by 250 million euros. The balance of trade with non-EU countries was in surplus – exports to those countries accounted for 1 billion euros more than imports from those countries. Exports to the 19 euro area countries accounted for 49% of Estonia’s total exports, while imports from the euro area countries made up 59% of Estonia’s total imports.

In 2017, Estonia’s exports increased by 8% and imports by 9% compared to 2016. Similar increase occurred also in the exports and imports of the EU as a whole. The imports of the entire euro area increased by 9%, or 303 billion euros year on year, and exports grew by 7%, or 277 billion euros. The greatest decline compared to 2016 in exports among EU countries was experienced by Malta (22%, or 624 million euros). Exports increased the most in Germany (6%, or 76 billion euros) and the Netherlands (12%, or 61 billion euros). The exports of our main trading partners increased – exports in Finland grew by 15%, or 8 billion euros, in Sweden by 8%, or 9.5 billion euros, in Latvia by 12%, or 1.3 billion euros and in Lithuania by 17%, or 3.8 billion euros. Imports grew in Finland by 13%, or 7.1 billion euros, in Sweden by 7%, or 9.1 billion euros, in Latvia by 16%, or 2 billion euros and in Lithuania by 16%, or 4.1 billion euros.

In 2017, the share of Estonia’s exports in EU exports amounted to 0.3% and the share of imports also to 0.3%. In terms of both the exports and imports turnover, Estonia outperformed Latvia, Malta and Cyprus. In Estonia, exports in 2017 amounted to 9,737 euros per capita, which is approximately 500 euros below the EU average (10,217 euros). Exports per capita were the smallest in Greece, Romania and Cyprus. Exports include not only the country’s own output but also the mediation of goods produced in other Member States through the given country, i.e. re-exports. Re-exports have the biggest impact on foreign trade in the Netherlands and Belgium, where the export figures for 2017 were the highest in the EU – 33,788 euros per capita in the Netherlands and 33,494 euros per capita in Belgium. Estonia’s imports per capita amounted to 11,194 euros – approximately 1,200 euros more than the EU average (10,032 euros). The biggest per-capita imports of goods were recorded in Luxembourg (33,810 euros), Belgium (31,433) and the Netherlands (29,762), while the smallest ones were reported in Romania (3,846), Bulgaria (4,248) and Greece (4,673).

Exports and imports by continent, group of countries and main countries, 2016–2017 (million euros)